ASSOCIATIONS
INCORPORATING COLD CHAIN
Recognising the value of fresh
produce market agents to the industry
By Lindie Stroebel and Tommie van Zyl
F
air and transparent price forming
mechanisms are critical to bring
about equal access to the
marketplace. In principle, the fresh
produce markets, together with the
integrated role of market agents, are
critical to the South African and southern
African industry to enable market access
for all producers and buyers.
The market system in South Africa,
within which agents function, can be
credited for the fact that prices are
discovered by the transparent
interaction of supply and demand in a
free relationship between producers,
agents, and buyers that share the same
goal of serving the consumer. This system
enables large and small producers to
have equal access to markets, whether
domestic regional fresh produce
markets, metropole fresh produce
markets, or the export markets.
The agents serve as efficient
aggregators of market forces from the
supply and demand side. Even a weak
market signal of supply or demand can
be translated into a price. Farmers in
South Africa are spared the frustration of
producing products with weak or no
demand and no prices, as is happening
in many parts of the world dominated by
bilateral agreements or contract markets
at wholesale or retail level.
To the credit of the agency system of
selling, continuity of supply of products in
South Africa is enabled by the price
signal, which drives rational behaviour by
producers, buyers, and their customer
— the consumer — reacting to the
market forces. This has enabled the
South African farming sector to be
competitive in world terms. This supply
only gets disrupted by extreme and
damaging weather, not the market.
Consumers can rely on the steady
supply of products they need and that
they are willing to pay for, enabled by
the activities of diligent and interactive
agents conveying the demand to
producers. The number of southern
African neighbours active at the national
fresh produce markets to procure fruit
and vegetables for their countries is proof
of the value created in terms of mass
supply of product by the undistorted
fresh produce market in South Africa.
As a firm supporter of a free and open market system, the local Produce Marketing
Association (PMA) endorses competitive practices that are inclusive of all role players
throughout the fresh produce value chain.
The PMA endorses competitive practices.
It is therefore important for the industry to
recognise that the very competitive
sales environment in South Africa is
enabled by the sales commission system.
The agency system of sales is definitely
not under siege. The stress test put to the
system of sales by fresh produce market
agents might ultimately be a blessing for
the profession in the sense that the
debate can shed light on the value that
it adds to our industry and society. CLA
ABOUT THE AUTHORS
Lindie Stroebel is the general
manager of the Produce Marketing
Association (PMA) of southern
Africa, and Tommie van Zyl is the
chief executive officer of ZZ2 and
country council chairperson of PMA
southern Africa.
COLD LINK AFRICA • September | October 2017
www.coldlinkafrica.co.za
25